This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Prices > Markets And Prices – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Markets And Prices Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Customers frequently search online to find the most competitive price for goods and services. Which of the following influences on pricing strategies is most likely to have led to this development? A) State of the economy. B) Technology. C) Legislation. D) Cost of producing the product. Show Answer Correct Answer: B) Technology. 2. Which of the following is NOT a problem with rationing? A) Unfair. B) Difficult. C) Time consuming. D) Expensive. Show Answer Correct Answer: B) Difficult. 3. What is a black market? A) The term for when business is good and profitable. B) The term for when business is losing money. C) When goods and services are exchanged illegally. D) None of above. Show Answer Correct Answer: C) When goods and services are exchanged illegally. 4. What happens to a market in equilibrium when supply increases? A) QD will exceed QS, so price will drop. B) Undersupply means that the good will become more expensive. C) QS will exceed QD, so price will drop. D) Excess supply means the producers will make less of the good. Show Answer Correct Answer: C) QS will exceed QD, so price will drop. 5. What is the name of the smallest amount that can legally be paid to most workers? A) Supply cost. B) Equilibrium price. C) Minimum wage. D) Price floor. Show Answer Correct Answer: C) Minimum wage. 6. If you produce durian chips and dried banana decreases in price, then the price of your durian chips would likely ..... A) Go down. B) Go up. C) The equilibrium price is the same. D) None of above. Show Answer Correct Answer: A) Go down. 7. Adam Smith describes the benefits to all through our selfish or self-interested actions. He calls it ..... A) Laissez Faire. B) Selfishness. C) Market efficiency. D) The invisible hand. Show Answer Correct Answer: D) The invisible hand. 8. In the early stages of the 'growth' phase of the product life cycle, prices are what? A) Generally kept low. B) Maintained at a set level. C) Increased as consumer demand for the product increased. D) Reduced to be the cheapest in the market. Show Answer Correct Answer: C) Increased as consumer demand for the product increased. 9. An established maximum price that sellers may charge for a good or service is known as what? A) Price Ceiling. B) Price Floor. C) Shortage. D) None of these. Show Answer Correct Answer: A) Price Ceiling. 10. An economy in which average incomes have fallen by 5% has also seen the demand for holidays overseas fall by 20%. It can be concluded from this that the income elasticity of demand for holidays overseas is A) +4.0%. B) +0.25%. C) -4.0%. D) -0.25%. Show Answer Correct Answer: A) +4.0%. 11. Which is NOT a characteristic of the price system? A) It prevents shortages. B) It is flexible. C) It is efficient. D) It is neutral. Show Answer Correct Answer: A) It prevents shortages. 12. Suppliers often reduce prices because they A) Have a shortage of products to sell. B) Have a surplus of products to sell. C) Want to decrease consumer demand. D) Want to increase the product supply. Show Answer Correct Answer: B) Have a surplus of products to sell. 13. Which of the following is NOT true about a market supply and demand curve? A) Supply slopes upward; demand slopes downward. B) The curves intersect at equilibrium. C) There are two curves on one graph. D) Supply slopes downward; demand slopes upward. Show Answer Correct Answer: D) Supply slopes downward; demand slopes upward. 14. What is meant by the term disequilibrium? A) When quantity supplied and quantity demanded are not the same. B) A sudden lack of goods. C) Smallest amount that can be paid to a worker. D) When quantity supplied and quantity demanded are equal. Show Answer Correct Answer: A) When quantity supplied and quantity demanded are not the same. 15. All other things being equal, supply curves slope upwards from left to right because A) Higher prices lead to higher costs. B) Higher prices lead to higher output. C) Lower prices lead to higher demand. D) Higher prices lead to higher profits. Show Answer Correct Answer: D) Higher prices lead to higher profits. 16. At which stage in the product life cycle might a business reduce the selling price of a product to clear stock that is no longer in demand? A) Maturity. B) Decline. C) Introduction. D) Growth. Show Answer Correct Answer: B) Decline. 17. The financial and opportunity costs consumers pay when searching for a good or service A) Fixed costs. B) Variable costs. C) Search costs. D) Marginal cost. Show Answer Correct Answer: C) Search costs. 18. The definition of laissez-faire literally means ..... A) Market structures. B) Price mechanism. C) Let it happen. D) Natural rights. Show Answer Correct Answer: C) Let it happen. 19. Due to rising car traffic, demand for bicycles has increased. The new equilibrium will show: A) Fewer bikes sold, but at a lower price. B) More bikes sold, but at a higher price. C) Fewer bikes sold, but at a higher price. D) More bikes sold, but at a lower price. Show Answer Correct Answer: B) More bikes sold, but at a higher price. 20. Equilibrium prices rise when? A) Demand decreases; supply increases. B) Demand increases; supply increases. C) Demand increases; supply decreases. D) Demand decreases; supply decreases. Show Answer Correct Answer: C) Demand increases; supply decreases. 21. The price elasticity of supply for most goods is A) Zero. B) Between zero and-1. C) Between-1 and minus infinity. D) Positive. Show Answer Correct Answer: D) Positive. 22. The market clearing price is also called the A) Equilibrium price. B) Fair market price. C) Unit price. D) Sale price. Show Answer Correct Answer: A) Equilibrium price. 23. A price ceiling placed on the amount people pay for housing is called ..... A) Maximum costs. B) Rent control. C) Minimum wage. D) Housing control. Show Answer Correct Answer: B) Rent control. 24. The stage in the product life cycle at which a low price might be charged in order to establish a product in a competitive market is: A) Decline. B) Maturity. C) Growth. D) Introduction. Show Answer Correct Answer: D) Introduction. 25. Any legally set price for a goods or services ..... A) Price Floor. B) Price Control. C) Minimum Wage. D) Price Ceiling. Show Answer Correct Answer: B) Price Control. 26. "Wealth of Nations" a book by Adam Smith pushed the importance of A) Government ownership. B) Large corporations. C) Supply and demand. D) Tradition. Show Answer Correct Answer: C) Supply and demand. 27. An industry that is dominated by a few large firms is ..... A) An oligopoly. B) A monopoly. C) A competitive market. D) None of above. Show Answer Correct Answer: A) An oligopoly. 28. The Law of Demand states that as price decreases ..... A) Quantity demanded decreases. B) Quantity demanded increases. C) Production increases. D) Quality Decreases. Show Answer Correct Answer: B) Quantity demanded increases. 29. What happens when the supply of a good is greater than the demand? A) The good is discarded. B) The good becomes a luxury and price rises. C) Either the good remains unsold or the price drops. D) Either the good is saved for later sale or the price goes up. Show Answer Correct Answer: C) Either the good remains unsold or the price drops. 30. What is a market where goods are sold illegally? A) Product Market. B) Wal-Mart. C) Black Market. D) Factor Market. Show Answer Correct Answer: C) Black Market. ← PreviousNext →Related QuizzesMicroeconomics QuizzesEconomics QuizzesMarkets And Prices Quiz 1Markets And Prices Quiz 3Markets And Prices Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books